Ireland is ‘fine’ with Apple, not Europe

Apple has the technological world at its feet, but the European Commission is not ‘fine’ with that. Hours after rising to the top of the tech world when it announced the launch event for its new iPhones, the industry giant was sent crashing to Earth with a mind-boggling €13 billion penalty ($14.5 billion) for tax avoidance in Ireland. It was Europe’s biggest-ever tax sanction, 40 times bigger than the erstwhile record of €300 million handed to Atlas Copco earlier this year and almost at par with the total slapped on other companies — Google and Microsoft included. Dublin has been long known for offering “sweetheart” deals to big companies, and has often earned the ire of its fellow EU member states on its ‘level of fairness’. Apple’s tax deal with Ireland is legal. It works both ways: big businesses like Apple can afford to go to places with low taxes as it helps them save costs.

In return, the countries hosting them bag investments and jobs for citizens. Fair game. However, this may sound unfair to smaller firms that play by the rules. It leaves them with little choice but to be stuck in places where they have to bear a heavier tax burden. It must be noted, however, that Apple still pays certain taxes in Ireland. The case against the company is tax avoidance, not tax evasion. Apple and Ireland have vowed to fight the case, setting up a potentially protracted and expensive long legal battle, and are confident it will be reversed. Should Apple lose and pay the huge fine, will customers have to pay for more expensive products from its stable? A tax structure categorising firms based on income, regardless of where they are based sounds like a plan. Good luck with that.